While finding new job and climbing the ladder to better opportunities, always consider the value of a benefits package. It has a major impact for you and/or your family. Different companies will offer different things. We have already explained many common benefits. Ideally you would be able to receive as many of these benefits as possible. It’s hard to put actual dollars and cents to a benefits package. But you should consider the general value of the benefits provided. Particularly when you are negotiating for a salary or raise.

Medical Insurance

Most employers offer affordable medical and dental insurance for you and/or your family. Some companies even pay for it altogether. However, some small companies may provide no coverage. Still others may be willing to give you a small amount of pre-taxed dollars to help you pay for your own health insurance coverage. In most cases though, partially or fully paid medical insurance is a standard benefit. Always ask questions about their policy. That way you don’t wind up with medical bills you didn’t expect. A lot of companies have a waiting period before your medical insurance benefits kick in. Usually, it’s after three months of employment. Also make sure you understand what types of deductibles are required. If you opt to pay a lower monthly cost for your insurance, it may mean you have to pay a higher deductible. In other words, you may have to spend some of your own money first before your medical insurance helps cover the expense. Finally, be sure you understand whether your medical insurance provider allows you to see any doctor in their network without a referral. If they don’t and you see a specialist (an asthma doctor, for instance), you may have to pay out of your own pocket. These doctor visits, bills and medications from a visit with a specialist won’t be covered if your insurance provider requires doctor referrals and you didn’t get one. That can be very expensive, so be sure you fully understand your medical insurance benefits. Once you leave your job, you can continue to have the same medical insurance coverage for up to 18 months. It’s called COBRA medical insurance but it can be very costly.

VALUE TO YOU: Very high. Medical Insurance can save you hundreds of thousands of dollars in extreme cases.

Dental Insurance

Another common benefit is complete dental insurance. Some medical insurance providers have dental plan coverage as part of your overall benefits package. However, many dentists are covered by other providers that have nothing to do with your medical insurance. If you end up being covered by both, evaluate which has a lower deductible and which covers the highest percentage of services. Little differences can add up if you need extensive dental work, such as root canals or crowns. Most dental and health insurance plans cover the complete cost of teeth cleaning twice a year and x-rays once a year. Beyond that, a percentage of the cost of all dental services is covered. Check your policies closely because certain procedures may be considered cosmetic, such as teeth whitening. The provider may not pay any of the cost of those types of services.

VALUE TO YOU: High. Full coverage dental plans can really save you money when it comes to services beyond basic teeth cleaning. Dental work is often very expensive.

Vision Insurance

Vision insurance coverage is often offered through a company outside of your standard health care provider. Vision insurance generally covers the cost of the office visit for an eye exam. It also provides a discount on eyeglasses or contacts. Sometimes vision health care plans may cover conditions such as an eye infection, for example. If there is a more serious medical condition related to your eyes – such as cataracts –your medical insurance would likely cover those expenses instead (surgery as an example). It can get confusing, but the best rule of thumb is to use the vision insurance for simple things like eye tests and purchasing glasses or contacts. The cost for vision insurance is usually minimal. If it is offered, consider taking it unless you have great eyesight.

VALUE TO YOU: Average. Covering an office visit, even partially, is a definite savings. The discount on eyeglasses or contacts is generally around 20-25% for most providers. Considering the cost of new frames and lenses, this is a decent savings. However, you can often find a better discount from an eyeglass retailer by looking out for coupons in the mail, on the Internet or in the newspaper.

Life Insurance

Many companies will offer free or affordable life insurance as part of their benefits package. It is hard to imagine that you would ever need this. However, death is part of the process of life, and no one can predict when it might happen. It’s important then to think about what kind of financial help your family receives once you are gone. By all means, consider this a great benefit. Often you will have the option to purchase additional coverage (usually in $10,000 chunks) for a small amount every month. This is a supplement to the basic coverage. It’s also a very easy way to get affordable life insurance for you or your family. When thinking about whether or not that’s something you should do, consider your age, your health, your current financial status and the finances of your family if you were to die. Another thing to keep in mind is that when you leave the job, your life insurance does not go with you like your medical insurance can.

VALUE TO YOU: Very high. For very little, if any money, you can rest easy knowing that your family will be taken care of.

Accidental Death & Dismemberment

This is a benefit that you would receive if you or a family member had an accident that either killed or maimed any of you. For instance, an accident where someone loses their sight or a finger or feet would be considered accidental dismemberment. You would receive insurance payments to help with the costs. How much you receive depends upon your insurance policy. Sometimes employers offer this at no cost to you. Sometimes it is offered for mere dollars a month. There are exceptions to most of these policies. Money is usually not paid out for death or dismemberment caused by war, mental illness, suicide, drug use or drunk driving.

VALUE TO YOU: High. If this is offered for free as part of your benefits package, be sure and sign up. If you have to pay for it, evaluate the value for you and your family. For instance, if you drive a lot or have a very long commute, your chances of being in an accident could be greater. At the same time, if you are involved in potentially dangerous hobbies like four-wheeling, it may be worth it. Be sure you understand the details of what is and is not covered.

Disability Insurance

Disability insurance is a benefit that replaces some of your income if you become either temporarily or permanently disabled and can’t work. Disability falls under two categories: short term or long term disability. Each state has different guidelines as to what is considered short term and what is long term. A percentage of your income is paid back to you each month until you can work again. The amount of money you receive every month depends upon your salary. Sometimes your Social Security benefits will also figured into your disability pay. As a general rule, employers pick up the tab for disability insurance. If you receive disability income that your employer has paid for, you will be responsible for all taxes on that income unless the employer tells you otherwise.

VALUE TO YOU: Very high. It’s the type of benefit that doesn’t seem like much until something happens. Long term disability can last for years or even the remainder of your life. Over time, that’s a very generous benefit.

Vacation Pay

Contrary to popular belief, employers are not legally required to offer paid vacation time to employees. However, most companies offer paid vacation to full-time employees. How long each employee gets varies widely from employer to employer. The times you are able to use it may also vary by employer. In addition, you will probably receive time off for nationally recognized holidays like New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Depending upon what you do, you may have to work those days and receive time off later. You may get additional holidays if employed by the government. Sometimes companies will also offer something called floating holidays (especially if Christmas and New Year’s fall on a weekend). These days are in addition to your regular vacation time.

VALUE TO YOU: Very high. Everyone needs to take time off for themselves and their families. Keep an eye out for companies with generous vacation policies that let you accrue time off or earn more vacation after a certain number of years.

Sick Days & Personal Time Off

Sometimes sick days or personal time off (PTO) gets lumped into your vacation time. However, more and more companies understand the need to take time here or there to visit the doctor or dentist. Some employers let you attend to these personal matters without cutting into vacation days. Each company is a bit different with how they handle sick days. Some have a policy of taking what you need and that’s that. Others may designate a specific amount of sick days you can take outside of your vacation time. However, a doctor’s note may be required. And it’s never recommended to call in sick and use some days before or after a vacation. Some companies offer paid time off and consider it the equivalent of a vacation. In other words, paid time off puts everything into a bucket of hours; you may use it any way you wish.

VALUE TO YOU: Very high. If you get sick days or PTO in addition to vacation days, it’s an outstanding benefit.

401(k)

Right now, 401(k) retirement plans are optional. You don’t have to participate if you don’t want. However, almost one-third of companies are automatically enrolling their new employees into a 401(k). It’s a trend that could continue. Basically, a 401(k) lets you take either a dollar amount or percentage of your paycheck each month and put it into retirement savings. That amount is invested. If you’re years away from retirement, you might wonder why you should bother. That’s a big mistake. Here’s what you need to know about a 401(k):

• For every dollar you put in, the employer will put in a dollar of their own (sometimes up to 8%). That is FREE money. If you are “vested?? that means all the money the company contributed is yours to keep when you walk away.
• The money you contribute is not money you have to pay in taxes every month. In fact, you won’t pay any taxes on the money in a 401(k) until you withdraw it. You’re actually paying less money to the government with each check.
• You can borrow against your 401(k). As a last resort, you can borrow money out of your own 401(k) account and pay it back over time. The interest is usually low, but the more money you take out, the less money your 401(k) can make.

For more detailed information, see our article about 401(k) plans.

VALUE TO YOU: Very high. There is no reason not to contribute to a 401(k) unless your financial situation will not allow for the money to be taken out of your check.

Cafeteria Plan/Flexible Spending Accounts

A cafeteria plan is sometimes called a flexible spending account. It allows you to put money aside for expenses not covered by standard medical insurance or child and elder care programs. The good news is that this money comes from your salary as “pre-tax?? dollars. It reduces the amount of annual income you must pay taxes on. Here is what you need to know about cafeteria plans:

• Before the plan kicks in for the year, you need to figure out how much you might spend on things like contacts or eyeglasses (and anything related), day care expenses, any out-of-pocket medical or dental expenses, etc. Keep in mind that it’s important not to think you’ll need more than you actually do. Any money in the account that you don’t use by the end of the year is lost. You can’t just take out any leftover money to spend. It’s not a savings account. Your employer will actually get to keep the remaining dollars.
• Money is taken from each paycheck over the course of the year and put into your flexible spending account. The amount taken out will be based on how much you estimated you’ll spend on the above expenses. There is generally a limit to how much you may contribute, so be sure and ask that question of your employer.
• You pay all your expenses up front for contacts, glasses, day care, dental, etc. After you have paid, you need to submit a claim and related receipts for your costs. The plan administrator will then cut you a check from the funds in your flexible spending account.

VALUE TO YOU: High. While you are still paying for your own expenses, you are saving money on taxes. This benefit may not be seen as valuable by some people if they don’t plan on a lot of outside costs. However, it’s recommended if you have to care for children, an elderly parent or you know you will have some sort of procedure during the year which isn’t fully covered by your insurance (having wisdom teeth removed, for example).

Profit Sharing

Some employers will pool a percentage of their profits into an account so that they can share them with employees at a later time. How much you could receive depends on your normal pay. Generally, the more you make, the more of the profits you will get. The amount you receive also depends on how well the company has done. If the company is doing well, you could really benefit. If it doesn’t, you won’t get any additional money. A word of advice – never count on this money. It can change vastly from year to year. Consider it a reward or bonus for work well done.

VALUE TO YOU: Very high. All that is required of you is hard work and contributing to company growth any way you can.